Proptech Check: Renters, Landlords Demand Touchless Entry, Building Management
The pandemic is changing how people view and maneuver through different spaces, including in dense apartment buildings. Proptech features that manage access and entry are finding new demand as more users require touchless access and new management systems.
The firm Latch was founded in 2014 as a flexible access and management system. Peter Weiss, the firm’s chief real estate officer, said there hadn’t been real innovation with apartment building locks for decades, even though stakeholders use them multiple times per day. Weiss said CEO and co-founder Luke Schoenfelder saw an opportunity to drive a shift from analog to digital access to help people feel safer in their homes.
The firm has expanded and recently unveiled LatchOS, a building operating system that manages each user and device in apartment buildings. Features include smart access, flexible connectivity, visitor and delivery management, smart apartment devices, video security and workflow management.
For users, LatchOS enables unattended and secure package delivery, remote control for smart devices, and it acts as a credential to unlock every door, entryway and elevator for a completely contactless process for residents, guests and service providers.
Instead of replacing locks, Latch also creates solutions that work with existing locks, and the mobile app helps manage who has access to buildings, as well as other aspects like users’ speakers, thermostats, lights and more.
Latch claims that one in every 10 buildings being built in the country have Latch products installed. Weiss answered questions via email about how the landscape has changed since the pandemic hit, how investor interest has been affected, and ways the multifamily industry is adapting with proptech features.
Commercial Observer: How was the smart access system started? What were the firm’s goals when it launched, and what were the goals prior to the pandemic?
Weiss: When we launched, our goals were to design a complete access system that works for every opening, allowing everyone to use flexible credentials via their phone, door code or a keycard to seamlessly move through a building — from the front entrance to the gym to the elevator to the apartment unit. Both building managers and residents can share that access with the people they trust, from friends and family, maintenance staff, delivery providers, dog walkers and more.
[…] Latch is now in more than 1 in 10 new apartments being built in the U.S., from historic buildings in California and New York to affordable housing in Baltimore and luxury towers in Indianapolis. We also expanded into Canada last year.
How has the strategy changed over the last six months?
We have always had bigger plans than just being an access company. In the past year, our teams have been hard at work at delivering a new kind of “super building” with the single system that powers everything. We have been true to these goals even amidst the pandemic.
There are two areas that our product teams have doubled-down on. (This includes firmware and software.) We’re always iterating on our access solutions, looking at firmware upgrades or even mechanical improvements to improve the user experience for residents and property managers.
With our software, we’ve been working to unveil new opportunities and partnerships that make the entire system even better for building management and its residents by enabling amazing experiences. Earlier this year, we launched a full “Works with Latch” partner program that includes industry-rated smart home devices — including thermostats, lights and leak detectors — and we’ll continue to expand that program for the rest of the year.
We’ll be announcing two very large, exciting partnerships before the end of the year. One is an integration with a major property management system, and the other is a well-known tech giant.
Has demand for your product been affected by the pandemic? Can you quantity or explain?
There has been a shift in culture in how we interact with our spaces now that we are working from home and spending more time indoors. Owners and property managers are all looking to solve this new problem and Latch has always been looking to empower the owner and the resident beyond access through services and experiences. Even though new (project) starts may be experiencing a decline or delays, many of our customers and potential customers are taking this opportunity to learn more about how technologies like Latch can help create better places to live. We are also seeing a great deal of interest to retrofit assets due to the low infrastructure requirements for our platform.
Specifically, owners have been looking into technology that allows residents to go from curb to kitchen with minimal physical contact. This is something our technology has been designed for from day one, and is a point of strength for us in this environment.
Also, seven of the top 11 developers on the National Multifamily Housing Council list are officially Latch customers, including Alliance, Greystar, Wood Partners, Lincoln Property Company, Rangewater and Toll Brothers.
How has the proptech market changed over the last six months?
Many CRE tech companies have had to pivot or insure they are creating value for their addressable market. If you are not saving money, making money, or demonstrably showing increased efficiencies, there is not a place for you anymore. Owners are getting smarter and doing more diligence now that they need to fast follow their peers. There will be more consolidation too
In real estate, generally, I think we will see a reimagining of buildings to be more contactless, and to have common areas and amenity spaces designed to reduce crowding. I think unattended leasing will continue to grow in popularity to fill vacant units. Residents will probably continue to order more packages to their residence and possibly even ask for more in-unit services to take care of their spaces, which have taken on an even more important role in their daily lives.
Customers are looking at using Latch for things like contactless elevator experiences, unattended showings, scheduling restrictions on amenities and more. Our ability to support customers in these new-use cases as they adapt to a changing environment in multifamily and student housing is extremely important to us. And because we build our own hardware and software, we are able to respond quickly to changing needs.
(With packages,) total online spending in May increased 77 percent year-over-year, which in normal times would have taken between four to six years to experience. Package management and delivery is a huge challenge for property managers. With this type of package volume, things like package lockers are not scalable solutions. Latch has partnerships with national delivery carriers across the country to help couriers and delivery people get into apartment buildings seamlessly, eliminating issues around package theft or having someone onsite to oversee this every day.
(With food deliveries,) food orders soared 67 percent in March, even as overall restaurant traffic fell 22 percent. In June, DoorDash scored a valuation of $16 billion as coronavirus pushed it to the top of the food-delivery chain. For residents, food and grocery deliveries are essential to their daily lives, and with Latch they have the ability to let them in via the app so they’re able to experience the full “curb-to-kitchen” delivery experience if they wanted, all without having to interact or get in close contact with anyone. With [the Intercom feature], this visitor experience becomes even better.
What happened to investor interest from developers and operators since the start of the pandemic? Why?
Investor interest has remained quite high. At the beginning of the pandemic, investors were being cautious and holding on to liquidity until they saw how things started to play out. As I mentioned, we have seen technology emerge as an important area for owners and developers to invest in for their properties. In turn, this has kept interest high from the same people to invest in companies who are at the forefront of changing the technology landscape in multifamily.
Owners have seen the necessity for increased efficiency and this will come through technology. Therefore, they are looking for the companies that will emerge as leaders in the different verticals of proptech. Money is still coming into the space as owners and investors are doing their diligence.
The Federal Reserve’s decision to keep rates low has benefited the real estate borrower (even though spreads have widened) and therefore has allowed many projects to continue to obtain financing.
How else is the multifamily industry adapting with proptech features?
Culture around multifamily is changing. (…) We expect that the cost of multifamily living is increasing faster. But how can owner developers maximize the benefits to residents based on suburban vs. urban environments? People will still want to live in cities in the near term. The learnings from COVID-19 will show up in the future when we think about health and well-being of individual living environments. (…)
How has the proptech market mobilized to address remote working needs in multifamily properties?
The best property managers are quickly adapting to the changing culture of multifamily to provide residents with clear communications and engagement, digital means for payments and building maintenance needs, and are introducing new practices — often using new technology — to create safer and healthier environments in units and in common areas. In short, the best property managers are using technology that will truly add value for residents and owners to adapt to the changing environment.